Overall, end of year equities have had a strong performance in 2020 despite market volatility caused by the novel coronavirus pandemic. With the Fed’s policy of low interest rates, corporations have been able to take advantage of the low-cost borrowing to invest in the stock market and make profits, reducing the effects of the crisis. But looking ahead to 2021, what can we expect from the equities market?
Due to the extraordinary circumstances of the pandemic, investors are likely to be more mindful in their decision-making. There are certain sectors which are expected to outperform in 2021. Healthcare and technology stocks have been resilient throughout the pandemic and will likely remain strong performers in the new year. The healthcare sector may benefit from the arrival of effective vaccines in the near future, as well as additional stimulus packages approved by the government. Similarly, technology stocks are expected to benefit from the shift to digital operations in various industries, driven by increased demand for cloud-based services and remote work tools.
In 2021, the industry is likely to continue to be driven by corporate earnings and economic recovery, as well as the introduction of new products and services. The recovery process to pre-pandemic levels will take a while, but the markets have demonstrated an ability to adjust to the changing environment.
The success of vaccine rollouts, government stimulus packages, and the future consolidation of the stock markets will be major factors in the performance of the end of the year equities in 2021. With these in mind, it is reasonable to assume that equities will remain a safe bet for investors in 2021, although some fluctuations are expected along the way. Investors should do their own research and explore available options to ensure that their portfolio is best suited to their needs. Ultimately, 2021 should be an exciting time for equities, and investors should look forward to riding the good times and embracing any setbacks.
